This paper shows that depending on the distribution of banks' uncertain liquidity needs and on how monetary policy is …

depository institutions skyrocketed, as the Fed injected liquidity into the U.S. banking sector. This paper introduces bank … liquidity risk and limited market participation into a real business cycle model with ex ante identical financial intermediaries …, whereas it matters for "uncertainty shocks", i.e. mean-preserving spreads in the cross-section of liquidity risk. Liquidity …